What California's insurance commissioner does — and how it affects your wallet

This was written by staff at the nonprofit newsroom CalMatters. It was republished by The Mendocino Voice in partnership with CalMatters to bring relevant nonpartisan news to Mendocino County readers. Learn more about CalMatters here.

SACRAMENTO, CA., 9/12/2026 – In November, California voters will choose who oversees one of the biggest insurance markets in the world.

Insurance commissioner may seem like an obscure regulatory position, but it's a consequential one: It leads the Insurance Department, which regulates home, auto, life, health, workers' comp and other insurance. The commissioner is tasked with making sure policies are available, premiums are affordable, and that insurance companies are delivering on their promises.

Those responsibilities have a direct effect on California residents' pocketbooks as risks for wildfires and other climate-related disasters grow. Seven of the state's top 10 most destructive fires have occurred in the past decade. California residents also face higher costs for just about everything, including insurance premiums, which the insurance department is responsible for approving.

Most insurance commissioners are appointed; California is one of 11 states whose insurance commissioner is elected. The current commissioner, Ricardo Lara, is a Democrat and former lawmaker and has headed the state's insurance department for the past eight years. State Sen. Ben Allen and former San Francisco Supervisor Jane Kim, both Democrats, are battling to replace him once his term ends in January.

The next commissioner will have to balance the needs of consumers, insurance companies, consumer advocacy groups, fire survivors and more.

"Your role is not to be friend or foe, except (be a friend) to the California consumer," said Lucy Wang, former special counsel for the insurance department under Lara. Wang left the department late last year and is now senior counsel at a law firm in San Francisco, representing insurers in regulatory matters and litigation.

CalMatters talked with experts such as Wang, consumer advocacy groups and Lara's predecessor about what the commissioner can and can't do.

Lara declined to be interviewed for this article. Insurance department spokesperson Michael Soller sent the following statement: "Guided by an unprecedented level of public outreach in every part of the state, (Lara) wielded executive power to overcome entrenched opposition from all sides and modernize insurance regulation to meet the climate crisis."

Setting policy and regulations

The commissioner sets policy and implements new rules — many of which affect consumers' wallets — either through the regulatory process or by working with state lawmakers on legislation.

Several years ago, some insurance companies stopped writing or renewing policies in California after a slew of massive and deadly wildfires led to a huge number of expensive claims. The companies complained that the rates they were charging didn't match their risk, and that the insurance department approved rate increases too slowly. State lawmakers tried to pass legislation to address those issues. When they failed to do so, Gov. Gavin Newsom issued an executive order directing Lara to solve the problems. Last year, Lara implemented new regulations containing provisions from the failed bills — including ones the insurance industry had long sought.

The new rules allow insurance companies to take catastrophe modeling — which includes future risks, not just historical data — and reinsurance costs into account when setting their rates. That means Californians will generally see premiums rise if they haven't already. The department is also trying to speed up how fast it reviews rate-increase requests from insurance companies.

Lara's department and the insurance industry say the commissioner's so-called sustainable insurance strategy is starting to work. Some companies have resumed writing policies in the state, though the department does not yet know exactly how many of those are new policies, according to Soller.

The last-resort FAIR Plan — a pool of insurers required to sell fire insurance to property owners who can't buy it elsewhere — has grown significantly over the past few years as some insurers have stopped selling policies. But it has grown at a slower pace lately, which the department points to as another sign Lara's new rules are working. As of June, it still had nearly 700,000 active policies, an 8% increase since September 2025 and a 157% increase since September 2022.

Another new regulation that recently took effect involves the role of "intervenors" in insurance rate reviews. Under Proposition 103, California's voter-approved insurance law, any member of the public can intervene — hence the term — to object to an insurer's request for a rate increase and be compensated for it. Advocacy group Consumer Watchdog, whose founder wrote Prop. 103, has been the main intervenor in the state. The group says that from 2002 to 2024, it saved Californians $6.4 billion.

"(The intervenor process is) an extra check on insurance prices going higher and higher," said Will Pletcher, an attorney for Consumer Watchdog. He said insurance companies "will always be able to outspend consumers," and that the process gives the public the ability to analyze proposed insurance rates.

Average annual premiums for homeowners insurance in California — whose home prices are the highest in the nation — are in the middle of the pack, but have risen 23% since 2023, according to an analysis by comparison website Bankrate.com.

Lara's new rule includes a requirement that an intervenor must make a "substantial" and distinct contribution from the insurance department's own work, and leads to a change in the department's decision or other action. Opponents include 32 consumer-protection, labor and public advocacy organizations. They say the new rule will make it harder for intervenors to get paid — Consumer Watchdog's compensation from 2002 to 2024 comes to $14.2 million — and could lead to fewer challenges of insurers' requests to raise rates and potentially higher insurance bills for Californians.

Lara and the group have long been at odds; Consumer Watchdog has raised questions about his ties to the insurance industry and has pushed for him to be more transparent.

"The current commissioner is trying to punish (founder) Harvey (Rosenfield) and Watchdog, so you have these messed-up rules," said Robert Herrell, executive director of Consumer Federation of California, another consumer advocacy group that sometimes intervenes in rate filings.

Herrell, who once worked in the insurance department, said, "You don't want to just rely on the expertise of the department. Outside, fresh eyes could see new things."

Lara has also proposed a regulation that insurers don't like: He wants them to submit their plans for managing solvency risks to the insurance department.

Wang, the former lawyer for the department, had a hand in drafting it. She said the idea is that the department needs all the information it can get to ensure a stable insurance market.

Insurance companies are already required to share financial information with the National Association of Insurance Commissioners. Insurance industry representatives said in public comments in July that the regulation would be somewhat duplicative and burdensome, and would require new experts and expenses.

Some public advocacy groups, including Public Citizen, support Lara's proposed rule. In public comments, a representative from the group urged the department to go further, including by establishing specific requirements for how insurers should report climate-related risks.

In another example of how the commissioner's authority can directly affect consumers' bottom lines, in July a California appeals court upheld Lara's right to continue letting insurance companies use drivers' marital status as an optional factor in setting rates, which has been allowed since 1996, under regulations added by former Commissioner Chuck Quackenbush. Unmarried drivers have been found to pay more for auto insurance, consumer groups have said. The case is expected to be appealed and could reach the California Supreme Court.

Holding insurers accountable

The commissioner can examine insurance companies' conduct and ask them to make changes, or work with the Legislature on shaping new laws to compel them to do so.

After the Tunnel Fire in the Oakland Hills in 1991, many homeowners discovered they were under-insured. The commissioner at the time, John Garamendi, pressured insurance companies to provide an extra $300 million of coverage. Now a U.S. congressman, Garamendi was seen as a fierce consumer advocate who was combative with the insurance industry — an approach that worked in some cases but not in others.

Survivors of the Los Angeles fires in January 2025, many of whom are still trying to rebuild, called on Lara to step down late last year. Frustrated by claims delays, they criticized the insurance department for not being helpful enough after the fires.

"Fire survivors are 100% right that the way they're treated is wrong," said Amy Bach, executive director of consumer advocacy group United Policyholders. But she added that the department cannot do much about many insurance industry practices such as insurers assigning survivors multiple adjusters, nor can it adjudicate policyholders' claims and disputes with their insurers.

"The reality is that (the department) cannot stand in the shoes of a private attorney," Bach said.

Despite that, Lara's predecessor, Dave Jones, said the commissioner should be bringing more enforcement actions against insurers.

"I think it's important to have a commissioner that is willing to exercise the authority that he or she is granted within the statutes, and is independent not just from the influence of the insurance industry, but also from the governor and the Legislature," Jones said.

Lara's department did investigate State Farm's handling of claims from last year's Los Angeles County fires. The department revealed in May that State Farm violated laws — including by delaying and underpaying claims — and recommended millions of dollars in penalties and a possible one-year suspension. But the department has yet to schedule a hearing on the matter, and fire survivors late last month filed a lawsuit against Lara and the department, seeking the appointment of a judge to hear the matter and asking to participate in the proceedings as an intervenor.

The insurance department also brought legal action against the FAIR Plan, accusing it of denying smoke-damage claims after the Eaton and Palisades fires. The effects of smoke damage can be less obvious, and no testing standards are in place, though two bills recently passed by the Legislature would establish first-in-the-nation standards.

The department said survivors of last year's fires filed about 13,000 smoke-damage claims; Lara ordered a task force to study such claims. The task force released its recommendations earlier this year. Some are incorporated into the bills now on the governor's desk, including testing for toxic materials, which will affect what insurance will be required to cover. Lara backed Assembly Bill 1795; the other bill is AB 1642.

Wildfires are the biggest challenge of the moment for the commissioner, but the position also regulates many other insurance matters. During Jones' tenure, one of the main issues he tackled was health insurance. The Covered California health insurance exchange had just rolled out in response to the Affordable Care Act, also known as Obamacare.

The commissioner can review health insurance policies and rate changes but cannot block rate increases — despite Jones' effort to expand the position's authority to do so.

Still, Jones pushed to exclude some insurers from the small-business health insurance marketplace because he said they showed patterns of excessive rate hikes. And he and other consumer groups successfully advocated for caps on what Covered California consumers have to pay for specialty drugs, which put him at odds with then-Gov. Jerry Brown's administration.

"That made people very unhappy with me, but it was the right thing to do," Jones said. "We need a commissioner who's willing to do that."

This article first appeared at CalMatters here.

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